FHA Loan Articles
News, updates, and explanations to keep you informed.
Does Zoning Matter for VA Loans?
Many VA borrowers use their VA loan benefits to buy and own homes in traditional neighborhoods, but you shouldn't feel limited to these areas when looking for a new home. Do you live in the city? Are you looking for a condominium, multi-plex unit or other types of property not found in the suburbs?
What do VA regulations say about approving loans in a mixed-use building such as a condo or multiplex unit? Some VA borrowers see the potential income in running rental properties, and a VA mortgage for a multi-use property is tempting. Does the VA allow such use?
Yes -- as long as the borrower lives on the property as the primary residence.
When the VA decides to approve a loan on a property zoned for both residential and commercial use, there's a review of the property's "remaining economic life". If a building is appraised at having a remaining economic life of at least three decades, the Department of Veterans Affairs considers that a viable building to issue a VA home loan on; a condo set above a shop in a neighborhood, for example, would theoretically be approved for a VA home loan if it meets all other VA requirements because there is no danger of the residences in that building being phased out over the lifetime of the loan.
The remaining economic life of a building is determined in the VA property appraisal process-it's not something a real estate agent or loan officer can judge accurately. Getting this particular information is something that would become available only to a serious buyer. If you are pre-approved for a VA loan but haven't decided on a property yet, it's possible to speculate, but the decision on the viability of a commercial/residential building won't be made until the appraiser does their work.
FHA NEWS and RELATED ARTICLES
If a borrower is getting a divorce, for example, refinancing the property under a single person's name (removing the spouse) would make sense. The reverse is true for a single borrower who is refinancing and getting married.
When an FHA borrower applies for a loan and the spouse does not co-sign or co-borrow, are there situations where the spouse would be obliged to sign loan documents? It's a commonly asked question in states where community property laws exist.
FHA loans are available for condominiums--a fact that surprises some FHA loan applicants, but is a fairly common FHA insured mortgage option. A condo is a property with ownership titles for individual units within the property.
FHA rules include guidelines for how the lender must review an FHA loan applicant's credit data. The lender is given clear instructions on how credit scores are used in the loan approval process.
The FHA issued several press releases about contaminated drywall products imported from China which may have been used to construct homes later purchased with FHA insured home loans.